Strategic Motivation: The Case of Domestic Joint Ventures in The Chemical Industry
Fiol, C. Marlene
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https://hdl.handle.net/2142/70462
Description
Title
Strategic Motivation: The Case of Domestic Joint Ventures in The Chemical Industry
Author(s)
Fiol, C. Marlene
Issue Date
1986
Department of Study
Business Administration
Discipline
Business Administration
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
Ph.D.
Degree Level
Dissertation
Keyword(s)
Business Administration, Management
Abstract
This study examines the factors that influence the choice to form domestic joint ventures in the chemical industry. Previous research has proposed two models to explain domestic joint venture behavior. Both models are rooted in an Industrial Organization framework. The External Economic Model views joint venture behavior as primarily a means of increasing profits by reducing external competition. The Internal Economic Model suggests that in high technology industries such as the chemical industry there are internal strategic needs (e.g., acquisition of managerial expertise or technology) that motivate domestic joint venture formation.
The present work updates and extends application of the Internal Economic Model to the study of the U.S. chemical industry. It identifies a gap in the model's ability to explain joint venture behavior. For a large group of mid-sized chemical firms, techno-economic factors do not adequately explain differences between joint venture active and non-active organizations.
The study introduces and develops a third model explaining domestic joint venture behavior in this industry: The Internal Non-Economic Model. The general dimensions of the model are developed on the basis of existing literature on strategic decision making and through a series of personal interviews with decision makers in the firms of the sample: Decision style of the organizational leader and top management posture toward the external environment are proposed to be important factors influencing whether or not joint ventures are considered.
The general model is refined and tested through a rigid form of content analysis (semiotic analysis) of Letters to Shareholders in annual reports of the firms in the sample. The results support the hypothesis that a centrally controlling, personally involved CEO will be less likely to consider interfirm cooperative ventures than will his less personally involved, less dominant counterpart. Also, in those cases where the external environment is perceived to be a major force in determining success or failure of the company, top management is less likely to consider cooperation with any part of that externality--even though, paradoxically, this is when the need to cooperate may be greatest!
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